Wendy’s International to redistribute around 200 restaurants to franchisees . . . .

Bankruptcy court approves sale of NPC International’s Pizza Hut and Wendy’s restaurants to Wendy’s parent and Flynn Restaurant Group for around $800 million

The sale of NPC International’s Pizza Hut and Wendy’s locations to Flynn Restaurant Group and Wendy’s Co. has been approved, according to court filings. The three parties —NPC, which filed for chapter 11 bankruptcy protection last summer, Wendy’s and Flynn Restaurant Group, which is the largest restaurant franchisee in the country in terms of sales — agreed to the deal earlier this month, and the United States Bankruptcy Court for the Southern District of Texas approved it on Wednesday. According to the agreement, Flynn will purchase 951 Pizza Hut locations and around 200 of NPC’s approximately 383 Wendy’s units. Wendy’s parent company will buy the remainder of Wendy’s locations and then redistribute them to franchisees, according to the agreement, which is valued at a total of around $800 million for both Wendy’s and Flynn’s purchases. Flynn already operates more than 1,200 restaurants under the Applebee’s, Taco Bell, Panera, and Arby’s brands. Artie Starrs, CEO of Yum Brands’ Pizza Hut division, issued a statement welcoming Flynn as a Pizza Hut franchisee.  “The agreement with Flynn Restaurant Group advances Pizza Hut’s transformation strategy focused on modern, delivery and carryout restaurants and outstanding customer experience while preserving thousands of jobs. Flynn is an existing Yum! Brands franchisee for Taco Bell that is well-capitalized, growth-oriented, and brings a strong track record of operational excellence. We are confident that Flynn’s ownership of these restaurants will make the entire Pizza Hut U.S. system stronger and we welcome Greg Flynn and his team to the Pizza Hut family.” According to the initial agreement, Wendy’s and Flynn agreed to offer jobs to all of NPC’s restaurant workers and “substantially all” other employees. Source: NRN.

SANITATION

FDA Food Safety Programs see Increased Funding

The enactment in December of the Consolidated Appropriations Act of 2020, including approval of the US Food and Drug Administration budget for fiscal year 2021, should ensure continuity in the nation’s food safety programs and initiatives as the Biden administration takes the nation’s helm. The overall fiscal 2021 FDA budget, which includes the agency’s activities in the spheres of drugs and medical devices as well as food safety, provided for $3.21 billion in discretionary funding in fiscal year 2021. Including user fees, the FDA budget totaled $5.88 billion. The budget as enacted by Congress fell short of the $6.2 billion in total funding for the FDA sought by the Trump administration in its proposed budget for fiscal year 2021 that was unveiled in February last year. Congress approved a $45.25 million increase in program funding for the FDA over the fiscal year 2020 enacted level (comprising a net increase of $42.25 million in appropriations supplemented by savings of $3 million from the one-time, fiscal year 2020 appropriation for a machine learning program). The increase in program funding from fiscal year 2020 included an additional $22 million for the agency’s medical products programs, $15.25 million for its food safety programs and $8 million for cross-cutting initiatives (including $7 million for artificial intelligence programs). The approved budget authority for the FDA food safety program in fiscal year 2021 was $1,099,160,000 compared with an enacted $1,088,881,000 in fiscal year 2020. Of the 2021 total, $343.789 million will be directed to the Center for Food Safety and Applied Nutrition (CFSAN) and $753.751 million to FDA field activities. Of the additional $15.25 million in funding appropriated for the FDA’s food safety programs, $1 million was allocated to enhance the CFSAN’s ability to ensure contaminated food is detected and removed from the marketplace as quickly as possible. The FDA had requested a $1.2 million increase for that purpose in its budget proposal. In its budget request, the FDA noted, “The increased number of detected outbreaks and subsequent investigations resulting from the success of Whole Genome Sequencing (WGS) has greatly increased FDA’s workload to identify and mitigate potential food safety concerns.” Congress, as requested by the FDA, provided $5 million in funding for assignment across several offices to enable the agency to continue regulating the use of cannabis-derived substances, such as cannabidiol (CBD), in FDA-regulated products such as dietary supplements and when used as unapproved food and feed additives.

Of the $5 million in funding for cannabis regulation, $2 million will be directed to the Office of Regulatory Affairs, the lead agency for FDA’s field activities including inspection of regulated products, $2 million to CFSAN, $500,000 to FDA headquarters and $500,000 to the Center for Veterinary Medicine. The Acheson Group, in its initial analysis of the fiscal 2021 budget, said, “Although cannabis legalization is continuing to make strides both federally and statewide, FDA has continued to hold a tight rein on food/food additive and dietary supplement approvals. Whether the $5 million granted for this regulation will increase the agency’s stringency or enable it to begin to allow for edible uses on the federal level is yet to be seen.” Congress also appropriated $6 million for a Shrimp Import Inspection Pilot Program, $1.25 million for allergen labeling, $1 million for cosmetics, and $1 million for the National Antimicrobial Resistance Monitoring System. Congress in approving the funding for allergen labeling voiced concern that the recent FDA Draft Guidance for Industry on Voluntary Disclosure of Sesame was insufficient to protect Americans with a sesame allergy and directed the FDA to consider further action to require sesame to be labeled the same as other major allergens. Congress also provided $8 million for “cross-cutting measures” for both food safety and medical products, including $7 million for the employment of artificial intelligence and other emerging technologies. With regard to these measures, the Acheson Group said, “With another key component of the New Era blueprint that of ‘leveraging technology and other tools to create a safer and more digital, traceable food system,’ and the pilot program the agency began in 2020 leveraging artificial intelligence and machine learning for the review of imported foods at ports of entry, it should come as no surprise that FDA requested $10.2 million (in its proposed fiscal 2021 budget issued last February) for technology. Even if nearly half the funding goes toward public health initiatives (as requested), the technological applications and lessons learned can likely be transferred as well toward food.” Source: Food Business News.

Best Ways to Clean your Conveyors the Right Way

Sanitation crews should follow the plant’s sanitation standard operating procedures (SSOPs) and the recommendations from the chemical suppliers, Food and Drug Administration (FDA) or the US Department of Agriculture. “The FDA is mostly concerned with transfer of chemicals and elements from one product to the next or when the sanitizer didn’t get completely rinsed off the conveyor,” said Jonathan Lasecki, Ashworth’s chief engineer. Such contamination isn’t as big of an issue on nonabsorbent, FDA-compliant materials such as stainless steel or plastic. “The biggest challenge is doing the cleaning,” Mr. Lasecki said. “That comes when bakeries are being pushed to get the product out to the market. You can’t skip the cleaning process and say, ‘I’ll go two or three days without it.’ It is too big a risk. You need to make sure people are conducting sanitation on their required schedules.” At the beginning of a production line, plants must first consider where freshly mixed dough might be sticking or clinging along conveyors to makeup equipment. “Here, the dough is sticky and then dries out, making it difficult to remove from equipment,” said Cari Rasmussen, food safety specialist, Commercial Food Sanitation, an Intralox company. To identify potential wrongdoers, operators also need to watch for carryback and spillage in the makeup area. “When conveyed materials fall to the floor or stick to the belt or conveyor components, this creates carryback, which causes sanitation issues,” said Kevin Quinn, sales manager, Douglas Machines Corp. “Traditional cleaning methods that involve caustic chemicals and large amounts of hot water can lead to excess moisture, which is not optimum in the baking industry.” Bobby Martin, executive product manager, AMF Bakery Systems, suggested that operators remain diligent in wiping off debris from the belt and conveyor structure on bread and bun lines. “AMF’s Raw Dough Conveyors are designed to provide as much access as needed to clean belt surfaces above and below the conveyor structure,” he said. Ms. Rasmussen said best practices include understanding current and potential future risks when making a belt selection. When conducting an allergen changeover, tensioned flat and fabric belts used in the makeup area are often wet cleaned to ensure dough removal. However, she noted, the equipment is not always designed for wet cleaning, so it’s critical to validate and consistently follow SSOPs.

It’s also vital to understand when dry cleaning and wet cleaning are most effective. “When water and some chemicals are introduced, it can lead to accelerated decline in the condition of the equipment, such as rusting and mold growth,” Ms. Rasmussen explained. To secure as long a running time as possible for a proofer, Scanico developed a new system for air handling that controls humidity and temperature. Søren Andersen, managing director, Scanico, a Middleby Bakery company, said this proofing process avoids free droplets of water in the air, giving the end-product a longer shelf life of up to 10 days with less need for cleaning due to humidity control. Hard deposits on oven bands and conveyors also pose a challenge. “It is preferred not to allow it to get to this stage,” said Brian Brown, vice-president, Berndorf Belt Technology USA. Use manual cleaning or try dry ice to remove carbon layer buildup. However, he noted, keep in mind that dry ice has logistic challenges related to the pellets and the noise level can be an issue. Bob Harrington, vice-president of sales and marketing, Capway Automation, pointed out that bakeries may also need to use harsh chemical cleaning, steam cleaning, sodium bicarbonate, and carbon dioxide-blasting along with hard scraping by hand to remove hard deposits and get the cleaning done. To keep a carbon belt running smoothly, rely on professional belt laser alignment and maintain consistent tensioning. Ensure scrapers and rotating brushes have uniform pressure and are kept free of debris. Ms. Rasmussen advised dry cleaning ambient spiral or racetrack coolers using vacuums and brushes with periodic wet cleaning as necessary for buildup. Use water for freezers with drains and a clean-in-place bar for the belt. Alcohol-based sanitizers are effective and dry more quickly than other sanitizers. Make sure belts are dry prior to startup to prevent spoilage microorganisms from growing and ice formation in the freezer. Although dry cleaning has always been the standard for post-baking equipment, sometimes using detergents — some even recommend Dawn to cut the grease — and water is the best way to do it. Mr. Harrington said that’s why Capway’s conveyors and Provident Depanner are designed to the higher IP 66 and IP69 cleaning standards that protect them against water projected from a nozzle. Source: AMF Bakery Systems/Dan Malovany.

Inspection Systems Upstream Improve Food Safety

Food safety is more important than ever. Bakers can’t afford to introduce any additional risk, so many of them are incorporating inspection technology earlier in the process. Adding metal detectors to the front of production lines, such as for inspecting incoming ingredients, will ensure that no metal contamination enters the process where it could damage equipment and/or be broken down into smaller pieces that may go undetected t the end-of-line inspection,” said Todd Grube, product manager, inspection systems, Heat and Control. Incorporating vision systems at various points can create added value, explained Erica Vannini, sales and customer service, EyePro System. “We see more and more customers are interested in simpler systems without integrated rejection to monitor and control the different steps of the process,” she said. “This allows them to improve their production along the line, acting in a fast way, and avoiding the same mistakes to be repeated on more products.” EyePro technologies can be incorporated at various points on the line including 3D-scanning systems that can be used in the forming and proofing areas and color vision systems after the oven. For tortilla production, the company offers vision process control after the press to ensure product diameters are on spec. This also saves space for inspections at various points on the line. “We integrate the metal detector chosen by the customer into our vision system, providing a dual-stage rejection mechanism driven by our processing control unit,” Ms. Vannini said. “In this way, we obtain a significant space-saving, allowing the use of two separate waste bins for vision and metal detector rejects.” In an ever-changing landscape, product variety is essential for making quick shifts. The right inspection technology in the right combinations will be key to keeping products of all sizes safe and sound. Source: Food Business News/ EyePro System.

Restaurant chains say the recent personal stimulus checks have helped them out, a Wall Street Journal report says . . . .

Restaurants Report Revenue Hikes After $900 Billion Stimulus

Restaurant chains say the recent personal stimulus checks have helped them out, a Wall Street Journal report says, though spending patterns from last time around suggest that might not last. According to the report, the $900 billion COVID-19 relief package passed last December, which included $600 payments for adults and children as well as $300 weekly unemployment boosts, while less than the CARES Act allowed last March, has still had an effect on consumer behavior. Some companies, including Church’s Chicken, Checker’s, Noodles & Co., and TGI Fridays, along with some McDonald’s owners and fine-dining chain Fogo de Chão, have reported higher sales which they credit to the stimulus financial aid. Tampa, Florida-based ChrisnElliott, who owns restaurant chains including Beef O’Brady’s and The Brass Tap, said people “relax a little, and they want some normalcy in their lives,” per the Journal. He said the stimulus coincided with a 6.5 percent boost in sales compared to last year and that it also came at the same time as several football games. But as restaurants continue to struggle, amid changing rules from local governments and the continuing threat of COVID-19, the boost might not last, WSJ notes. Restaurant sales dropped 19.5 percent last year, and with the chaos of the pandemic, tens of thousands of restaurants have already closed, with more to follow as the winter continues. After the first stimulus checks were sent out in April of 2020, the boost to the economy faded rather quickly, the news outlet noted. As COVID-19 began surging again in the holiday season of 2020, PYMNTS reports that some restaurants have flouted restrictions to try and make money as they were about to fail. TheCenter for Disease Control and Prevention (CDC) has had to fine establishments for violating indoor dining bans. Indoor dining has been riskier during the pandemic because of the enclosed environment and potential for poor ventilation, both of which can spur the virus. Source: By PYMNTS.com.

15 Empty Syracuse restaurants amid Orange Zone . . . .

Cuomo Proposes $50M to Help Restaurants Stuck in Orange and Red Zones

Update: Budget Director Robert Mujica gave more details this afternoon about how the proposed aid for restaurants would work. See below. Syracuse, N.Y. — Restaurants that spent months in restrictive orange and red zones would be able to tap into $50 million in state aid, according to a proposal from Gov. Andrew Cuomo. The money would be part of Cuomo’s proposed 2021-2022 state budget, which he outlined today from Albany in unusually broad strokes with very few details. The extra help for restaurants hinges, in part, on New York getting $15 billion from Washington as part of President-elect Joe Biden’s massive Covid-19 rescue plan.  In his message from Albany today, Cuomo acknowledged that restaurants were among the businesses hit the hardest during the coronavirus pandemic. Even as other businesses opened and viral cases surged, the state shuttered restaurants for weeks during late 2020 and early 2021 because of fears about increased transmission.

“I did that with a very heavy heart,” Cuomo said today.

The proposal would allow qualifying restaurants who lost $40% in revenues to apply for $5,000 in tax credits for each worker hired back. That would be capped at $50,000, Budget Director Robert Mujica said. Other small businesses could apply for similar tax credits, he said.

But restaurants don’t have to wait until tax time. Restaurants that were shuttered in late 2020 can apply for those tax credits now to get payments out faster, Mujica said. Those advance payments would be reconciled at tax time, he said. The proposal is part of the governor’s annual spending plan, a multi-faceted set of legislation that includes everything from education aid to infrastructure money to ideas about legalizing marijuana. As of noon today, those proposed bills were not yet public. Instead of providing detailed budget information, Cuomo today argued that New York deserves a large slice of Biden’s $1.9 trillion plan.

The governor laid out two scenarios.

In one, New York would get $6 billion in Covid-19 relief from Washington. That wouldn’t plug the state’s $15 billion budget gap. To make up the $9 billion, the governor says the state would have to cut education funding, health care programs, and money to local governments like Syracuse. In the second scenario, the state would fill the budget hole with $15 billion in federal aid. If that happens, he said, the state could afford a laundry list of program expansions, including more health care for poor people, aid to small businesses, lower-cost broadband to eligible families, and an approved tax cut to the middle class. The proposal for the restaurants, which would include those in New York City, would happen under the $15 billion scenario. The state Legislature must approve the budget. The state’s fiscal year begins on April 1. Source: NYUP.com.

The fast-casual expects to emerge even better on the other side . . . .

McAlister’s Deli Finds the COVID Silver Lining

McAlister’s Deli president Joe Guith heard the pundits like everyone else. If you were a lunch-based restaurant designed around dine-in, with a catering business, you might as well surrender to COVID-19. “That pretty much describes us to a tee, and yet we’re [not in trouble],” Guith says. While the FOCUS Brands chain faced its hurdles, like anybody else, the opposite is closer to reality. The 470-unit brand posted positive net unit growth in 2020 and returned to pre-pandemic sales levels by the end of the year, despite the fact dine-in remains significantly reduced, to roughly a third of the business. It’s a story of an on-premise concept morphing into an off-premises one, Guith says, and it hints at an even stronger McAlister’s on the other side. To put this into perspective, the fast-casual entered March with four modes of service—dine-in, takeout, catering, and delivery. Today, there’s closer to eight. But to begin understanding the journey, Guith recalls some serendipitous foresight. McAlister’s spent eight or so months last year researching and plotting a better guest experience, as well as a fresh loyalty program. Fortunately, the platform launched in mid-February. And the bulk of McAlister’s investment, both from corporate and franchisees, came in 2019. It set the foundation for the pandemic gameplan—accelerate accessibility at a 31-year-old brand known for its fast-casual-plus service before that was a widespread positioning in quick service. To start, some franchisees piloted curbside pre-COVID. It was something McAlister’s planned to evaluate in 2020. Yet in a matter of days, it became a survival tactic, and the brand expanded curbside to over 300 units within two weeks. Currently, it’s spiked into the double-digits of total sales, Guith says, and continues to hold. Improvements, like push-button arrival notifications, are on deck for 2021. First-party delivery came next. But a more recent change presents intriguing potential, long after COVID clears. McAlister’s is working on bringing tableside dine-in ordering to restaurants across the country. How it will work is customers who sign up for the app and loyalty program can sit down, order, enter their table number, pay, and wait for food to come out. No queuing up in line. Amid all the off-premises pivots of coronavirus, this is something Guith believes can bridge the “new normal” and what McAlister’s has always gotten credit for from guests. “Now, you put it into the time of COVID, when people want less interaction—they don’t want to stand in line, don’t want to touch screen; rather not touch anything,” he says. “You can go and sit down and order right off your phone. Great for anybody who wants that kind of interaction or more frictionless interaction.” Also great, he adds, for people with children (like Guith) who have tried, fruitlessly, to entertain them while waiting to get to the cashier. It’s a system Chick-fil-A and Panera Bread currently offer. But Guith believes McAlister’s can gain more traction. “The thing is table service is not part of their model, it’s not how their guest generally interacts with the brand,” he says. “For us, this is our model. That’s always been our model. And so for us, I think it’s a little bit more of a natural fit.” McAlister’s has piloted the platform “for a while now,” Guith says, and a broad roll out is slated for early 2021. “It’s almost as if you had a digital waiter, if you will. You can pull out your phone, you order, and then you wait,” he says. Feedback has been positive thus far in terms of “would I do it again, did I enjoy it,” Guith explains. Yet what’s been perhaps more alluring is the majority of guests said they would come more often. And half were new downloads. “And that’s before we even got behind it from a promotional standpoint,” Guith says. “This was kind of a soft roll in terms of awareness at a small number of units, not a meaningful investment behind it, but really to say could we execute it and do guests like it? And the answer was overwhelmingly yes on both counts.”

McAlister’s revamped its loyalty program ahead of COVID-19—a move that has paid off in more ways than one.

McAlister’s loyalty relaunch can’t be understated, either. Guith says it was among the biggest internal issues operators asked him to fix when he assumed the president role in April 2018. He previously served as brand president of Cinnabon.  Before, McAlister’s platform was more of a surprise-and-delight one that actually turned off in 2019. The company decided to keep it dark until the new digital suite was ready to go. Basically, a customer would get a reward based on if they came often, and spent enough. The “delight” would be whatever McAlister’s decided. “So a lack of transparency,” Guith says. “A lack of choice. Honestly, day one when I landed with the brand, I realized that was an opportunity.” The program today mirrors more of what you see from top-tier quick-service brands, like Starbucks. A points-based setup where consumers hit certain tiers and can access specific parts of the menu when it comes to rewards redemption. McAlister’s didn’t need to reinvent the wheel with loyalty, Guith says. Just spinning it at the same pace was a major step forward. And today, participation rates in McAlister’s loyalty program are tracking in excess of six times what they were pre-COVID. In fact, the company’s app was ranked only behind Starbucks, Panera, and McDonald’s in Incisiv’s 2020 Limited Service Restaurant Digital Maturity Benchmark report. McAlister’s was fifth in customer engagement and service (Starbucks, McDonald’s, Dunkin’, and Chick-fil-A were in front). The ranking put McAlister’s ahead of technology front-runners like Pizza Hut, Domino’s, and Chipotle. It all connects, Guith says. McAlister’s digital transactions represented maybe a 10th of sales before COVID. Now, it’s close to 40 percent. The brand got out of “tablet hell” in 2019 and integrated third-party delivery into its point-of-sale. “I can’t imagine what that would have looked like in 2020 had we not done that,” Guith says. “You literally would have had to have a person standing at the tablets all day punching in orders.” Guith says he’s been pleasantly surprised by McAlister’s catering of late, too. The chain pivoted offerings, from addressing smaller occasions with deli kits and family meal deals, which are more B2C catering (not something McAlister’s focused on previously) to creating Choose 2 Box Lunches—a new option for the brand that starts as low as $8.49. McAlister’s moved away from things like bulk salads and sandwich trays. The family meals and deli kits, targeted toward at-home group occasions, arrived in the spring. The box lunches are a more recent innovation, but one that’s picking up momentum, Guith says. “Between that and even dine-in, I’ve been surprised. What’s great is we built now this much larger piece of digital business for ourselves,” Guith says. The return of dine-in, as strange as this would have sounded before COVID, has been incremental for McAlister’s. It’s not cannibalizing the chain’s other digital pivots. And Guith believes mid- to late next year, the industry will see some level of return to normal when it comes to dining out. Given some recent openings have even set day one records, Guith is bullish about life after coronavirus. “We have weathered the storm incredibly well,” he says. “We’ve had positive net unit growth in 2020. And we have a very robust pipeline lined up for 2021. I’m excited about what the future is and we built very strong foundational elements. We’ve also come closer to our franchise community.”

McAlister’s digital transactions have spiked in recent months.

With delivery expansion came margin compression, naturally. McAlister’s worked to address that with pricing and its McAlister’s Delivers in-house program. Orders come in through its app and third-partners fulfill on the last mile. Guith says he’s noticed interesting parallels to the hotel industry on this topic. Fittingly, FOCUS Brands’ new CEO, Jim Holthouser, appointed in February, hails from Hilton Worldwide. “There’s an analog there,” Guith says. “What happened at hotels when Expedia showed up, for hotels and airlines? All of sudden they relaxed, whoa, third-party marketplace. We need to take some of this back direct. So I think that’s where we are from a foodservice standpoint. We’ve woken up to how important this is and the demand from consumers, and there’s got to be a rebalancing.” In a summer study from The Manifest, 65 percent of people said they turned to restaurant delivery during lockdowns. But a whopping 43 percent picked “individual restaurants” as their most popular outlet. DoorDash was next at 12 percent. “I think there’s rebalancing in building that infrastructure,” Guith says. Essentially, restaurants are scrambling to give customers that white-label option, which is both cost-effective for consumers, guards the value perception for restaurants, and is also margin friendly. Guith says check averages have been significantly higher through McAlister’s direct delivery. “Because we designed the experience differently,” he says. “We upsell better. We can feature our products in a different way that are more And McAlister’s evolution will be reflected physically as well. When he started with the brand, pickup windows were seen as a design feature “some franchisees did.” “But now everyone is doing that,” Guith says. “Most of our larger franchisees wouldn’t even consider opening without one now.” McAlister’s expects to push the model even further as it grows in 2021 and beyond. As conversion opportunities pop up, it’s going to be something the brand wants to take advantage of. Overall, though, McAlister’s wants to keep opening channels and improve customers’ experience with the brand, which Guith says will lead to better frequency. “It’s interesting how some of these things that we built, they didn’t dissipate or shift,” he says. “It was like OK, you built a whole new sales layer. Now you hang on to that and when other things start to come back, it’s incremental. Again, us being a dine-in concept and that being still significantly depressed from pre-pandemic levels, is very encouraging. Because I don’t know that it will ever come back to exactly where it was, but we definitely came back to higher levels than I thought we would by the end of [2020] and I think it will increase as we push through this next wave.” Source: QSR.

Increased takeout and delivery options as well as created meal kits for consumers to enjoy and/or prepare at home . . . .

Foodservice Brands Move into the Grocery Aisle

As the foodservice industry was forced to pivot to accommodate coronavirus-related lockdowns and protocols, even large-scale businesses struggled to keep sales up during the pandemic. Many increased takeout and delivery options as well as created meal kits for consumers to enjoy and/or prepare at home. Some restaurants even began selling ingredients to customers looking for pantry staples such as milk, bread and eggs. Bakery cafe chain Panera Bread started the practice last spring as a way “to move quickly to where the customer is, what the customers’ needs are,” said CEO Niren Chaudhary to USA Today. While some chose to create their own grocery sections, many foodservice brands have brought their products to traditional grocery aisles. Fast food restaurant chain Chick-fil-A debuted its first consumer packaged good products last April with the launch of bottled versions of its two most popular sauces at retail, and chef David Chang’s Momofuku restaurant group has also released a line of spices during the pandemic, which has already proved successful for the business, said CEO Marguerite Mariscal. These launches from foodservice brands were common before the pandemic reached the US, but have become even more relevant and critical now.

CPG sales provide a lifeline to restaurants

The restaurant industry has relied on income from sources other than on-premise dining since the pandemic began, and CPG sales have been a major contributor. Chef Christina Tosi’s Milk Bar bakery is another brand that launched CPG products during the pandemic; several flavors of Milk Bar’s iconic cookies were for sale at Whole Foods and Amazon last spring and rolled out in Target retailers across the country in the fall. “Grocery stores have always been my North Star — it’s why I started baking the way I do,” Tosi said to Bloomberg. “The American cookie aisle is relatively stagnant, and that’s what we’re coming out for.” Bagel and coffee shop chain Einstein Bros. Bagels has had a robust CPG business far before the pandemic, and the category is vital to the company’s corporate strategy, according to Ernie Mattin, head of consumer packaged goods at Einstein. Its Branded Solution Program allows select food retailers to improve the quality of their in-store bakery bagels while leveraging the strength of the Einstein brand. “Our CPG business hasn’t missed a beat,” said Mattin. “While the business has evolved from single-serve bagels into more pre-packed sleeves as a result of the pandemic, we have exceeded expectations in sales of our bagels and shmear at retail.”

Quality food at home

While coronavirus lockdowns and precautions have caused consumers to alter their eating habits, several CPG companies such as General Mills and McCormick & Co. have said they believe that these patterns and routines are likely to last beyond the pandemic. “With more meals being prepared at home, consumers are seeking higher quality options to feed their families,” said Mattin. In response to the overwhelming complaint heard about bagels purchased in grocery stores being a lack of freshness, Einstein introduced its latest CPG line in December: Take & Toast bagels, which are par-baked and meant to be finished in a toaster. “We wanted to solve that problem by offering a high-quality, fresh-tasting bagel, allowing consumers to get as close as possible to the true bakery experience right from their own kitchens,” Mattin said. “From a retailer perspective, we recognize the challenge of delivering product consistency across in-store bakeries. With Take & Toast, we have eliminated that added complexity by offering a simple, thaw and sell format, that requires no on-site preparation.” Source: SmartBrief/Food & Travel.

Winning menu and off-premises focus sets up transformed concept for success now and in the future . . . .

Lucky Danger: Heritage Shapes Menu, the Times Shape Service

Tim Ma is busy, but the co-founder of Lucky Danger, executive chef of American Son and Wild Days at the Eaton Hotel DC, culinary director of Laoban Dumplings, and executive chef of Prather’s on the Alley took time out to take us through his journey innovating during COVID-19. The pandemic hit the restaurant industry hard. How did you respond?
We did what was best for the public health and closed the Eaton Hotel DC and its food and beverage outlets, American Son, Kintsugi, Allegory, and Wild Days. But we didn’t stay dark for long. We used the kitchen facilities and staff to provide meals for those in need. We partnered with World Central Kitchen, Real Food for Kids, Hook Hall Helps and many other feeding programs to produce more than 2,200 meals a week. We also turned the hotel kitchen into a community to-go kitchen. We combined 10 years of my greatest food hits (including dumplings) in one all-star takeout menu, and we created meal kits to sell with virtual cook-alongs. Many of our plans came together quickly because we needed to make money. We also got creative with outdoor dining, alcohol-to-go sales, and wholesale food options as food and beverage regulations relaxed. In the beginning, it was all about survival. It still is now, but we’re more optimistic. Since the initial onset of the pandemic, American Son and Wild Days at the Eaton DC have reopened. We kept Laoban Dumplings open for delivery only and transformed Pranther’s on the Alley to Lucky Danger.

So, what is Lucky Danger?

I drew on my family heritage to develop Lucky Danger during the pandemic. My uncle, Paul Ma, was a successful restaurateur in the 80’s; his work—and our family—is showcased in the Smithsonian Family History Museum. I borrowed from my family to create food and a menu at Lucky Danger that is “American Chinese by a Chinese American.” I’m excited to present the food I knew and grew up with. It’s not about fusion or any amalgamation of cultures, but unapologetically American-Chinese food presented through my modern lens. Chef Andrew Chiou is my co-founder and partner and leads the kitchen for Lucky Danger. The menu features familiar favorites such as Crab Ragoon, Pan Seared Pork Dumplings, Duck Fried Rice and Broccoli Beef. And less familiar, but still American-Chinese items such as Pig Ear Salad, Crispy Aromatic Whole Chicken, Cucumber Pork, and Eggplant with Basil. Lucky Danger is a ghost kitchen for now (i.e. take-out only), until we choose to expand to a traditional brick-and-mortar restaurant. Looking forward to a post-pandemic climate, what will you carry with you?
Restaurants and hotels are vital to the culture and life of a city. But we have thin margins and have been shown that we can go from thriving to closed in a matter of days. I think a lot of good innovation in the space of carryout, delivery, outdoor dining, and sanitation are here to stay. You will see hospitality businesses diversify in these and many other ways so they can make money. To think this will be the last pandemic we’ll experience is a bit naïve. It will happen again, or something else will, so having a dynamic hospitality model will be key to surviving. Source: The National Restaurant Association.

Chain uses food, technology to fulfill precise delivery needs and tempt appetites . . . .

Innovating During a Pandemic: Chipotle Connects with Customers

Restaurants in 2020 rely on technology as much as a menu to provide guests with a unique experience. We connected with Nicole West, vice president of Digital Strategy and Product Management, and Stephanie Perdue, vice president of Brand Marketing for Chipotle Mexican Grill, to discuss menu and technology innovation during the pandemic. Chipotle operates 2,650 locations in the U.S. and Canada. Q. COVID-19 hit the restaurant industry hard. How did Chipotle respond?
A. West: Optimizing delivery and carry-out was key. In March, we introduced a series of innovations to the delivery and pick-up experience, including transforming our second make-lines into Digital Kitchens, which feature dedicated teams and ingredient stations to prepare digital orders. A new tracker feature in our app provides real-time meal delivery updates, and the app and our website now give customers the ability to leave special instructions for delivery drivers to limit direct contact.

Q. Did the pandemic change Chipotle’s menu innovation strategy?

A. Perdue: Instead of limiting menu offerings during COVID-19, Chipotle is exploring menu innovations that align with its “Food with Integrity” standards. We believe there’s a connection between how food is grown or raised and prepared, and how it tastes. We were one of the first national restaurant brands to commit to goals on local and organic produce and the first to commit to using only responsibly raised meat with some of the highest animal welfare standards.
In alignment with this strategy, we began testing cilantro-lime cauliflower rice at more than 50 restaurants in Colorado and Wisconsin in July. We also launched new lemonades, aguas frescas, and teas from Tractor Beverage Co. that are non-GMO and certified organic across the U.S. and Canada.

Q. How did the pandemic change how Chipotle connects with customers through food and technology?
A.  West: We’re working to integrate everything fans love about Chipotle into our app. An example would be our Complete Customization feature that allows users to enter the nuances of their favorite orders digitally by making any ingredient light, standard or extra.      When the pandemic hit, we were in the process of testing partnerships with Uber Eats and Grubhub, so we decided to accelerate those connections to accommodate guests who were spending more time at home. With off-premises sales growing more than 200% year-over-year and accounting for 60% of total sales in Q2, it’s clear that digital offerings are resonating with fans. We’ll continue to leverage new insights about post-COVID-19 consumer behavior to meet guests where they are on the other side to identify the best ways to increase access to our brand.

Q. Chipotle also launched a clothing line made with avocado pits? How does this innovation play into Chipotle’s food and technology vision?
A. Perdue: Our Chipotle Goods collection features an open-looped line of Chipotle apparel which is dyed with upcycled avocado pits from our restaurants. Open-looped means that we are taking a waste product from our restaurants and incorporating it back into a new product. We have an aggressive goal for keeping waste out of the landfill — 50% diversion — so we’re continuing to explore innovative ways to divert it. Gloves to bags, a program that diverts our plastic gloves from landfills and upcycles them into plastic trash bags, which we then use in our restaurants, was one of our first attempts at “open-looping.” The avocado pit-dye collection is another way we are trying to repurpose our waste. Source: The National Restaurant Association.

Administration calls for OSHA and CDC to provide clarity . . . .

Biden Coronavirus Response Plan Includes Orders for Rules on Restaurant Operations and Worker Safety

Restaurants could soon receive more clarity on how and when they should operate thanks to a plan President Joe Biden issued Thursday to combat the coronavirus pandemic. Highlights of the plan from a restaurateur’s perspective include directing funds in the current Paycheck Protection Program to businesses that need it most and requesting guidance from the Occupational Safety and Health Administration, or OSHA, on how to protect workers during the pandemic, and from the Centers for Disease Control and Prevention, or CDC, on the circumstances required for restaurants to operate their dining rooms and outdoor seating safely. The United States will immediately work to prioritize funds under the recent COVID relief package to the companies hardest hit by COVID-19 and in compliance with public health restrictions, ensuring that small businesses have the funds they need to operate safely,” according to the plan. In terms of how restaurants can open safely, a summary of the plan said, “Social distancing is not a light switch. It is a dial. President Biden will direct the CDC to provide specific evidence-based guidelines for how to turn the dial-up or down relative to the level of risk and degree of viral spread in a community, including when to open or close certain businesses, bars, restaurants, and other spaces, when to open or close schools, and what steps they need to take to make classrooms and facilities safe; appropriate restrictions on the size of gatherings; when to issue stay-at-home restrictions.” Source: Restaurant Hospitality.

In an ode to simpler times, McDonald’s has launched its “Throwback Deal . . . . ”

McDonald’s is Selling Popular Menu Items for 35 Cents or Less during its ‘Throwback’ Thursdays Deal

With the promotion, every Thursday, customers can purchase one of their favorite menu items like cheeseburgers, shakes, and fries for under $0.35. The items are available at a fraction of their typical cost, with cheeseburgers and shakes typically clocking in between $2-3 per item. The Thursday prices harken back to McDonald’s original prices when it was first founded in 1955. A McDonald’s spokesperson told Insider the discounts pay homage to the restaurant’s earlier days and prices. “Offering our customers a safe, fast and easy way to enjoy their favorite menu items is more important than ever before,” the spokesperson told Insider. “Our McDonald’s App gives fans the scoop on new menu items and allows them to take advantage of tailored deals and offers with just a few clicks.” Each week through Feb. 18, the chain will feature a different item. This week McDonald’s offered a $0.25 cheeseburger deal. The company will offer different menu items each week, including shakes, apple pie, and fries. The offer is only valid through the company’s app and requires a $1 purchase. The “Throwback” Thursday deal is just one of many promotions the company has run in the past year. Other popular promotions include meals endorsed by celebrities, like Travis Scott’s meal — a deal so successful that the Golden Arches were in danger of running of burgers shortly after launching it. Source: Business Insider.

Walk-On’s announced an aggressive 2021 franchise development strategy planning to open upward of 25 new restaurants across the country . . . .

Walk-On’s Looks to Open Up Restaurants in 2021

Fueled by a recent growth equity investment from 10 Point Capital, the brand is poised for long-term expansion as it seeks qualified franchise partners to join the Walk-On’s team. Despite the challenges to the industry brought on by the pandemic, Walk-On’s has been able to remain steadfast through its keen focus on growth and is set to open its milestone 50th restaurant in Q1 in result. Recent multi-unit agreements confirm rapid expansion plans as Walk-On’s continues to target strategic franchise development in key markets throughout the Southeast and Midwest with over 150 locations in development. The brand sees growth opportunity specifically in Indiana, Iowa, Kansas, Kentucky, Nebraska, North Carolina, Ohio, Virginia and Wisconsin. “Our 2020 success was a collective effort of our determined leadership team and committed group of franchisees,” says Brandon Landry, founder and CEO of Walk-On’s. “By prioritizing the needs of our franchisees, team members and communities, we were able to successfully innovate, adapt and come out on top. 2021 will prove to be a fruitful year as we rollout new initiatives, achieve major company milestones and continue our strategic nationwide expansion. Our team is committed to the long game – growing strategically with the right franchise partners who are a cultural fit – and aspiring to be more than just a restaurant.” Amid the pandemic, Walk-On’s immediately jumped into action and suspended its royalty payments, with the suggestion that owners pour those funds into homegrown efforts and support their team members. Notably, Walk-On’s joined forces with Front Burner Restaurants’ Furlough Kitchen to debut “Furlough Kitchen by Walk-On’s,” a non-profit organization that provides furloughed hospitality workers free meals, no matter their former employer. The movement continues to gain momentum now having served over 30,000 meals across five states. Staying consistent to the Walk-On’s mission of supporting the communities it serves, the team recently pledged $100,000 to the Barstool Fund in the hopes of helping small businesses and other restaurants in their markets. Meanwhile, the brand has adapted its business operations to offer Curbside ‘To-Geaux,’ online ordering, the debut of its mobile app, and third-party delivery partnerships while rolling out all-new family value meals, take & bake options, grocery to-geaux and more. “Not only did the pandemic inspire a new wave of creative innovation, but it forced leaders to be aggressive in rolling out new products and services–realizing the value of not only preparing for the future but acting on it sooner,” says Scott Taylor, president and COO of Walk-On’s. “By quickly pivoting and rolling out these new revenue streams, we have since clawed back at sales with takeout remaining approximately two times what it was pre-COVID, with indoor capacity limits still ranging from 50 to 75 percent.” As teamwork and innovation remain a top priority in 2021, Walk-On’s has plans to debut several new initiatives including a new menu rollout and all-new team member uniforms. Additionally, Walk-On’s will embark on the construction of its first nontraditional location on Purdue University’s West Lafayette campus as a result of a partnership with Aramark that will open the door for further development opportunities. The brand will also debut a new restaurant prototype–The Bulldog–that is centered around creating a larger-than-life experience in a smaller than typical sub-7,500 square foot space. “We have a strong culture, the best quality product in the industry, and a winning business model with huge opportunities for growth,” adds Landry. “When these factors come together, we become an unstoppable force.” Source: fsr.

Drive-in QSR also plans more store format innovation, digital enhancements . . . .

Sonic Eyes International Expansion

Sonic Drive-In is planning its first international expansion, the chain’s president said during a presentation during the National Retail Federation’s virtual trade show this week. “Sonic is one of the few, large brands that is only domestic,” said Claudia San Pedro, who has been president of the Oklahoma City-based chain since 2018. She said Sonic will leverage the international expertise of its parent company, Inspire Brands, to grow the Sonic restaurant concept outside the U.S. “over the next couple of years.” Inspire also owns Arby’s, Dunkin’, Baskin-Robbins, Buffalo Wild Wings, Jimmy John’s and other restaurant brands. San Pedro did not provide further details about the plans to expand internationally, and a spokesperson for Inspire was not immediately available for comment. Inspire Brands’ ownership will also facilitate more testing of store formats, she said. Sonic launched a new prototype in July 2020, which she described as a “highly successful format.” The new store design, which debuted in Tahlequah, Okla., last summer, includes 18 car docks, a drive-thru, and a covered outdoor patio, along with a new bright color scheme. Going forward, San Pedro said Sonic will seek to incorporate more flexibility into its format designs to adapt to different site sizes and layouts, as well as to varying consumer needs in each market, especially as more sites have become available in the wake of the pandemic and as consumers increasingly embrace drive-thru, takeout and delivery. “One of the great advantages of being a part of Inspire Brands is that we have been able do a lot more testing — and we will be doing a lot more testing — of format innovation,” she said during the trade show. “We are going to be doing that in a few key areas: One of those is how can we retrofit the appropriate size building with the stalls and drive-thru for different real estate site sizes, and [another is] how can we improve the drive-thru experience to make sure we are meeting those guest expectations?” The potential for nontraditional store development is also on the company’s radar, she said. Closely aligned with the testing of new formats is Sonic’s investment in its mobile app, known as the Mobile Order Ahead system. The chain saw sales through the mobile platform “increase significantly” in 2020, San Pedro said. “This past year, we were able to accelerate the deals and offers that we made through the order ahead app,” she said, adding that such activity will continue in 2021.

Sonic also has expanded order ahead to make the service available online as well as from the app, so that customers can order from anywhere. The chain is also planning to add the ability for customers to tip workers through the payment function on the app — something San Pedro said customers have strongly requested. “That is one of the top three things we heard from our guests,” she said. “They want to be able to tip our carhops for good service.” Looking ahead, San Pedro said she expects that the ongoing rollout of the COVID-19 vaccine will have a strong positive impact on the restaurant industry and on the economy overall, freeing up customers to return to dining out more often and bringing more people back into the labor market. The industry will continue to feel upward pressure on wages, however, San Pedro said, which may drive price increases. Sonic will also continue to seek to offset wage pressures through efficiencies, such as the kitchen reconfigurations made in the new prototype stores. Sonic is also seeking to simplify its menu processes, which San Pedro described as “incredibly complex to operate” because of the chain’s extensive menu variety. She said pent-up consumer demand for dining out will yield benefits across the industry as the vaccine is rolled out and consumers again feel comfortable going to restaurants with friends and family. “The hope is that once we get the vaccine rolled out, it will lift that extra layer of stress we have all lived with, and we will get back to celebrating the things that are important to us that we have not been able to celebrate,” San Pedro said. Source: NRN.

SPAC founders had been looking for quick-service, small-dining-room brands . . . .

Landry’s Reportedly Eyes Going Public with Fast Acquisition

Texas billionaire Tilman Fertitta is reportedly in talks to take his restaurant giant Landry’s Inc. and his Golden Nugget casino holdings public with Fast Acquisition Corp., though the special purpose acquisition had been looking for quick-service brands. Bloomberg, in a report last week citing “people with knowledge of the matter,” said Fast Acquisition, which was created last August as a special purpose acquisition company, or SPAC, was considering raising more than $1 billion to back a possible transaction. Fertitta’s representatives said he would have no comment on the rumors. Fast Acquisition Corp. was listed on the New York Stock Exchange last August and set a target to raise $200 million. It was created by Doug Jacob, co-founder of &Pizza and co-CEO of the new blank-check SPAC, with Sandy Beall, the founder of the Ruby Tuesday brand. “We’re looking for quick-serve, fast-food, small-dining-room brands that we can take from good to great — so brands that have actually done OK during COVID,” said Jacob in an interview when Fast Acquisition was listed. Fertitta had been mulling various financing options, Bloomberg reported. Houston-based Landry’s owns such brands as Del Frisco’s, Mastro’s, Morton’s The Steakhouse, McCormick & Schmick’s and Bubba Gump Shrimp Co. Fertitta has his own acquisition companies under the Landcadia Holdings umbrella. Landcadia Holdings II Inc., sponsored by Fertitta Entertainment Inc. and Jefferies Financial Group Inc., in December, merged with Fertitta’s Golden Nugget Online Gaming Inc., an online gaming and digital sports entertainment company. Landcadia Holdings Inc. in 2018 merged with online ordering and delivery platform Waitr Holdings Inc. in a $308 million deal. Landcadia Holdings III Inc. raised $500 million last year to pursue an acquisition or merger. Landry’s was public from 1993 to 2010, when Fertitta took it private in a 2010 $1.4 billion leveraged buyout. He bought the Houston Rockets in 2017 for $2.2 billion. Landry’s Inc. owns and operates more than 600 properties in 36 states, including such additional brands as Chart House, Claim Jumper, Joe’s Crab Shack, Landry’s Seafood House, Mitchell’s Fish Market, The Oceanaire, Rainforest Café, and Saltgrass Steak House. Source: NRN.

Chuck E. Cheese parent CEC Entertainment emerges from bankruptcy . . . .

The Eatertainment Company has Completed its Financial Restructuring, Eliminating $705 Million of Debt

After filing for Chapter 11 bankruptcy in June 2020 and creating a plan of reorganization confirmed by the U.S. Bankruptcy Court on Dec. 15, Chuck E. Cheese parent company CEC Entertainment announced on Dec. 30 that the company completed its financial restructuring and emerged from Chapter 11 protection. The company emerged from bankruptcy with $705 million of debt obligations paid off under new ownership and a new leadership board. “We are thrilled to have emerged from our financial restructuring process and look forward to beginning a new chapter as a stronger and healthier company well-positioned to execute on our long-term goals,” David McKillips, CEC Entertainment’s CEO said in a statement. “Under new ownership, and with the leadership of our new Board, the CEC team is excited to continue delivering memories, entertainment, and pizza for kids and families around the world for generations to come. Behind the strength of our entire team and world-class brands, we look forward to growing through key opportunities and implementing our strategic plan.” After reducing its debt by $705 million, the company now has $100 million of liquidity to support operations and growth.

The new executive board consists of:

David McKillips, CEO of CEC Entertainment

Joshua Acheatel, senior investment professional at Monarch Alternative Capital LP

Howard Altman, chief investment officer of Metropoulos & Co.

Patrick J. Bartels Jr., managing member of Redan Advisors

Clifford Hudson, previously chairman of the board and CEO of Sonic Corp.

Lance Milken, founder of Ripple Industries LLC,

An additional director appointed in accordance with the limited liability company agreement of CEC Holdings.

In September, the company announced that they had received $200 million of debtor in possession financing from their first-lien lenders. The financial restructuring was based on a plan to sell CEC Entertainment’s reorganized equity or all of their assets, a sale of all of their assets to lenders or a debt for equity exchange. CEC Entertainment was advised during the bankruptcy process by Weil, Gotshal & Manges LLP as legal counsel, PJT Partners as investment banker, FTI Consulting as financial advisor, and Hilco Real Estate as real estate consultant. The Ad Hoc Group of First Lien Lenders was advised in this process by Akin Gump Strauss Hauer & Feld LLP as legal counsel and Houlihan Lokey Capital, Inc. as financial advisor. As of Dec. 30, CEC Entertainment and its franchisees operated 559 Chuck E. Cheese and 122 Peter Piper Pizza locations. The company will continue to reopen locations and bring employees back when it is safe to do so during the pandemic. Nation’s Restaurant News has reached out to CEC Entertainment for more information on the company’s new owners. Source: NRN.

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